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AbstractU.S. state budgetary stress continues to rise due to increasing pension fund contribution demands at a time when costs are also escalating in other areas, such as education and Medicaid. Higher pension liabilities are pressuring the creditworthiness of these states despite their overall strong revenue performance. One measure of the health of a pension fund is the funded ratio, which for state pension funds has fallen dramatically since 2000. If pension investment return assumptions are met over the near-term, funded ratios may begin to stabilize or improve in fiscal 2006 and beyond. The risks to such a scenario, in addition to the potential for investment return shortfalls, include a number of factors that affect funding, such as changes in actuarial...

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: CommentaryCriteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.